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'y lH ^ REYisiox or pate:n^t laws. 



SPEECH 



OF 



HON. BENJAMIN DEAN, 



OF MASSACHUSETTS, 



IN THE 



HOUSE OF REPRESENTATIVES, 



FBBEUAET 14, 1879. 



^ 



WASHINGTON 

1879. 



CKS -/5^.^ UvAfCu'cL. 



SPEECH 

OF 

HON. BENJAMIN DEAN. 



On the 1*111 (S. Xo. 300) to amend the statutes in relation to patents and for other 
purposes — 

Mr. DEAN said : 

Mr. Speaker : I have received some letters from constituents wliom 
I respect, wko are apprehensive there is some lurking evil in this bill. 
I have also received a circular cautioning me against it in addition 
to some newspaper articles in which the writers express some alarm 
at the attacks upon the rights of inventors, which they think they 
see in the bill, and at the evil destiny it will bring upon the indus- 
tries of the country. I think all of these fears are unfounded and I 
am therefore impelled to discuss this subject somewhat. I will notice 
some of these apprehensions at the outset. 

One writer thinks section 2 takes away from the inventor the con- 
trol of his own invention and gives the right to others to use the 
patent against his will. Now, in fact, there is no change in this re- 
spect. The patentee always had a right to two things unless he had 
voluntarily parted with them — a money compensation for his dam- 
ages or profits, (and I shall hereafter use the word damages alone,) 
and a right to enjoin any one from using the patent against his will. 
The proposed statute does nothing in the world in this regard but 
affect the question of damages ; the other right remains preserved to 
the patentee as fully as it ever was. No one can infringe a patent or 
make use of the invention without leave, under the proposed any 
more than under the existing law. If that could be done it would 
be an important change ; but no such thing is in this bill. The well 
established right to an injunction is expressly and in terms preserved 
unimpaired. 

Complaint is also made of the fourth section. This complaint is 
made in behalf of the patentee. This is astonishing, for it is certainly 
a provision in favor of the patentee. It expedites the cause. It 
hastens the determination of the rights of the patentee. Now, before 
an api:)eal can be taken, the cause has to wait the long and tedious 
accounting or determining of the damages; then comes the appeal, 
and all the time between the interlocutory decree and the accounting 
is lost to the patentee. He only loses by that delay. Why he should 
complain of the expediting of the cause it is difficult to see. The 
only fault with this section is that instead of giving the court power 
to authorize the defendant to appeal, it should require the defendant 
to appeal, if at all, from the interlocutory decree, and authorize the 
plaintiff to take his account and have that account sent up and be- 
come a part of the appeal, though the appeal may have been already 



4 

entered, so that all questions relating to the damages or account may 
be determined at the same and earliest time. 

Neither the patentee nor the defendant can complain of the fifth 
section, for it authorizes the court to grant inj auctions after the ap- 
peal as well as to suspend them. Patentees have never had occasion 
to complain of the unfriendliness of our courts ; they have always 
been the protectors of the rights of patentees. In fact a recent rule 
of the Supreme Court seeks to accomplish .pretty much the same end. 
Some complain of the ninth section, which authorizes the taking of 
testimony by either party which is liable to be lost by delay. This 
is but fair to both parties. In no case can it be determined which 
party it will benefit, but whichever is benefited it is just ajid equita- 
ble. This provision would be very seldom used. Every litigant 
studies 1 3 keep the other uninformed regarding his intentions and 
regarding his evidence till he has to use it in court. Nothing but 
necessity or the danger of the immediate loss of valuable testimony 
would induce a person interested either for or against a patent to do 
anything to discover his evidence to his adversary or to the world. 

Section 10 authorizes the bringing of suit s by parties adversely in- 
terested, to have the patent declared void, when the patentee unrea- 
sonably delays to bring a suit for an infringement. This is surely a 
just provision. No patentee should keep his patent merely for a 
threat. One of the greatest difiiculties meritorious inventors encoun- 
ter at the present day is the existence of a multitude of patents upon 
the same subject-matter, which though of doubtful validity stand in 
the way of other more meritorious inventions. They stifle and deter 
invention and the development of the very industries the inventions 
were intended to subserve, because the uncertainty attending them 
frightens off the capital needed for that development. But more of 
this by and by. The eleventh section is also so just that no one can 
fairly object to it. 

Why should one who is carrying on an extensive business be com- 
pelled to carry it on in the face of a constant threat from some pat- 
entee whose i)atent may not be valid and which the person carrying 
on the business believes to be invalid, without the law aftbrding him 
means of determining whether or not he must stop his business or 
submit to the demands of the patentee ? 

Why should a patentee be at liberty to stand by and say, "I will 
let this manufacturer do an immense business, he believing he can do 
it in security, and when the amount of business done is so large that 
the damages will be great I will pounce upon him with a suit for 
infringement ? " It is this class of men — it is the men who think this 
use of patents to be just, and who cry "Wolf!" "Wolf!" when any 
j ust legislation is proposed — that are the great enemies of the patent 
system. In presence of such an unwillingness to submit to what is 
fair and just, and in presence of such loud cries, when any legislation 
to correct evils and while so many patentees "No say turkey to Injun 
once," how can we wonder that the whole patent system becomes un- 
popular and we are called upon to defend it against its utter abolish- 
ment ? 

These remarks will also apply to section 1. It is better for the 
patentee that he should be prompt in the assertion of his claims. He 
will get more money by collecting of every infringer with promptness 
than by lulling a few into security by his acquiesence in their acts, 
and finally attempting to make them pay large damages. I have now 
taken a bird's-eye view of the more important objections to the bill, 
excepting its principal provisions, to which I shall now call the atten- 



tion of the House. I would go over the provisions of the bill in detail 
were I not in danger of making my remarks too long to command 
attention. 

When a patent has been adjudged valid "by a court of equity it is 
many times but the beginning of the plaintiff's labors and troubles. 
The case is referred to a master to state an account of the defend- 
ant's profits which have accrued to him by the use of the plaintiff's 
invention. This is a long, tedious, and expensive part of the litiga- 
tion, occupying in important cases months of arduous labor on the 
part of the master, counsel, and parties. 

The master and counsel charge a liberal per diem fee, as it takes 
all their time, and clients devote all their time to the accounting to 
the exclusion of everything else. In a single important cause many 
thousand dollars are frequently expended. Anything which will tend 
to simplify the process of accounting is a benefit and saving to the 
parties ligitant, but it is of especial benefit to the patentee, as time 
is constantly running against his patent. 

Every day makes its life shorter, and there is nothing so injurious 
as the delays he encounters by the wayside in the final establishment 
of his patent. This bill does tend to simplicity ; it makes the dam- 
ages alike, both in law and in equity ; it furnishes a sort of compass 
to direct parties in the ascertainment of the actual damages. The 
use of patented inventions is so completely mixed up with every- 
thing that we make and use that we must be guided by the light of 
experience, and a recurrence to the vrorking of a rule will help us in 
testing it. 

Take the case of the "kindling-wood machine." Because the use 
of the plaintifi^'s device would make kindling-wood, as far as the mas- 
ter could ascertain, seventy-five cents per cord cheaper than by the 
hand or any known method, the defendant was decreed to pay that 
amount, though he had not made any profits at all by the use of the 
machine. So that we had in this case the defendant liable for profits 
that he had never made. He was held to be a trustee for what he 
had never received, and he would not have used the machine at all 
if he had known he should be subjected to any such damages, and 
yet it is for the benefit of the patentee that his machine should be 
used. 

Besides, to change the habits of the people and to induce them to 
buy kindlings already manufactured, they must be made and put into 
the market at a much lower rate than before. If the patentee is going 
to obtain all the profit he would give to the community no induce- 
ment to change their habits and buy machine-made kindling-wood, 
aiid his invention would bring him no profit. Therefore the rule which, 
would give him all the profit would prevent the use of his patent alto- 
gether and make it worthless. This rule, therefore, was not the true 
rule, but a fallacious and jack- with-the-lantern rule. I have known it to 
work wrong in other than patent cases. There was once a case where 
one railroad sought damages against another railroad because the latter 
railroad crossed the former at grade. Experts testified that the dam- 
ages to the plaintiff's cars and engines amounted to a certain sum by 
the injury to the engines and cars caused by the shaking and jarring 
in crossing the tracks. The fallacy in the testimony could not be 
readily dis<Jovered, but when the aggregate of the damages sworn to 
by the experts was proved to be greater than the profits of the entire 
business on the road, it was evident that there was a fallacy some- 
where, and the method was thereby proved to be a wrong one. 

In another case a plaintiff proved that he suffered enormous dam-- 



6 

ages by a road being laid out throtigli his land, which contained large 
quantities of clay suitable for making bricks. He proved that the 
land contained so much clay, that so many bricks could be made of 
it, that it cost so much to make the bricks, and that the market value 
of the bricks was so much more than the cost of making ; and the 
aggregate damage came to a very large sum. The defendant was 
unable to point out any error in the calculation, but be did prove 
that any quantity of just such land containing just such clay, in the 
immediate vicinity, could be bought for a tride compared with tbe 
amount of damages the plaintiff had proved ; and the jury found for 
a very much less amount. There was, of course,, a fallacy somewhere 
in the plaintiff's case, though it could not be detected. 

In a recent case a board of railroad commissioners decided that a 
street railroad should pay to another street railroad company 3.8 
cents per mile for the use of the latter road's track, that is 3.8 cents 
for every mile run by any car over the tracks. They estimated the 
wear and tear of the track and every element of damage for the use 
of the track, but it turned out after a careful finding of all the profits 
of the road using the track that its entire profits, including the use of 
stables, horses, and cars, amounted to but 3.62 cents per mile. There 
was a fallacy somewhere in the way in which the commissioners got 
; at the damages. They probably would be unable even now to find out. 

These instances are sufficient to prove that the doctrine of savings 
is not correct and reliable. Its absurd results, to say nothing of the 
. expense of arriving at them, compels an alteration of the law in this 
^respect. 

A person invents some device which cheapens a certain manufact- 
ure or the manufacture of a certain product. He thereupon claims 
the entire gain, forgetful of the fact that the cheapening in manu- 
factures of all kinds is constantly going on, his invention is of no 
earthly use unless used by the manufacturer, and he must take his 
share of the profits of the business. The manufacturer does the in- 
ventor a service by using the invention if he pays for the use as cer- 
tainly as he benefits the manufacturer by allowing him the use of the 
invention. If I remember rightly it appeared at the lengthy hearing 
recently before the Patent Committee of the Senate that inventors, 
as a rule, when left to themselves and not troubled by infringers, re- 
ceive but a small percentage of the apparent savings resulting from 
their inventions. 

This must necessarily be the result in this age of progress and 
invention, where device after device and process after process are 
constantly rivaling and supplanting one another in the long run. 
Therefore the rale which provides for the ascertainment of a proper 
license fee, admitting all the evidence that can bear upon the ques- 
tion, excluding only the account of savings, which is a long, tedious, 
and expensive inquiry, is about as correct a one as in the present state 
of things can well be devised. 

In order that we may discuss this part of the bill more intelligently, 
let us have it before us. It reads : 

No account of savin es shall in any case be allowed ; and no evidence or account 
of the defendant's protits shall in any case be admitted, except as to actual profits 
resulting from making for sale, or selling the thing patented or the product thereof 
as aforesaid : Provided, That nothing herein contained shall exclude other evidence 
as to the utility and advantage of the invention as one element to aid in determin- 
ing a license fee where none has been established. ISTothing in this section shall 
airect the right of a plaintiff to an injunction. 

The section does nothing but exclude the technical account of the 



savings actually made by fcbe defendant, and tlie account as evidence 
of defendant's profits. That is, you shall not investigate the defend- 
ant's business, compel the examination of his books, and get at what 
lie has actually saved by the use of the plaintiff's invention. It does 
not exclude evidence of other testimony that the invention is a saving 
invention ; that it yields a profit to any user. The bill expresslj'' pro- 
vides that it does not " exclude other evidence " (than the account) as 
to the utility and advantage of the invention, as one element to aid 
in determining a license fee where none has been established. 

It does not alter the rights of parties as to the amount of the dam- 
ages the present law intended to give them. The present law — and 
bill No. 300 — undertakes to give the inventor the actual damages he 
sustains by the infringement. In the administering of the law the 
courts had become switched off upon a side-track that has been ad- 
hered to until it is found landed inextricably in a quagmire from 
which it cannot extricate itself. Congress must come to the rescue. 
There is nothing remarkable in this. The rule adopted by the court 
seemed to be simple. When put to the test of experience it has proved 
a failure. This was not and perhaps could not be foreseen. It was 
a departure from the rule of giving the actual, the real damages, and 
making the claim simply an account of savings — a rule just in some 
cases, unjust in others. 

I see one writer complains of an inventor being bound by a license 
fee established by himself, because sometimes a x^oorman will estab- 
lish too small a license fee. But that is the law to-day, and it is there- 
fore unnecessary to discuss the natural proclivities of a poor man not 
to take the most he can get for his invention. It is, however, and will 
continue to be the law that a license fee fixed under peculiar circum- 
stances will not always govern. A patentee may therefore prove that 
the merit of his invention consists wholly in the saving it makes in 
tbe cost of manufacture and may claim that this saving should be 
the amount of his license fee. Defendant may dispute his evidence on 
that point as well as put in other evidence on the question of savings ; 
but after the plaintiff has proved the power of the invention to save, 
the defendant cannot prove by his accounts what he did save, to dis- 
prove by his accounts the plaintiff's case, nor can plaintiff compel such, 
an aocount. 

It will be asked, why should not each party have this right? The 
answer is that though legitimate as an element in the proof of dam- 
ages, experience proves that this evidence is delusive. It leads to 
error and injustice. It is also a long and a tedious, expensive, and 
needlessly inquisitorial process. In other words, the plan has been 
tried in the balances of experience- and found wanting. That is all 
there is of it. 

This evidence is not theoretically inadmissible as one element, but 
practically justice is more just without it; and as a positive rule of 
damages it is neither theoretically nor practically correct. The twelfth 
section as amended in the House committee requires the payment of 
$20^ at the end of four years, and fifty at the end of ten years, to keep 
a patent alive. 

One of the chief troubles in our present patent system is the im- 
mense number of patents that are outstanding. I have always advised 
patentees when about to enter into a manufacture under a patent to 
have the Patent Office examined for unused patents relating to the 
proposed manufacture, which patents, on account of some defect or 
other cause, failed to succeed, and buy them up or get them out of 
the path in some way. It always turns out that there are such pat- 



8 

ents which, altbongh unsuccessful in themselves, might be held to be 
infringed; and if not, there would be great danger of some rival 
springing up as soon as the new manufacture should prove profitable, 
who might l3uy the outstanding patent and have it reissued so as to 
cover the later and better invention. 

These questions arise between patentees. The evil falls on pat- 
entees who are making new machinery and therefore this section is of 
especial benefit to inventors. It is a process of separating the chaff 
from the wheat. As the wheat is more valuable after the wheat is 
cleaned, so the useful patents are patents more valuable after they 
are cleaned by the falling away of the worthless ones. There are 
patents for devices for cleaning wheat and other cereals. This bill is- 
a thousand-fold more valuable to the community and especially to 
patentees than any patent for cleaning grain. 

The surviving patents are much more valuable. It is a cheap proc- 
ess of cleaning them. They become more valuable than the cost of 
the process. I do not mean to say that I want to get out of the way 
all the patents that are not in profitable use. ' A great many inven- 
tions for many years only serve to keep people at work inventing im- 
provements to go with them ; they are useful in anticipation at least. 
The patents that will be winnowed out like chaff are those which are 
forgotten, because nobodj'' uses them and nobody thinks it worth 
while to try to improve them. 

I have heard the objection to Senate bill No. 300, that its provis- 
ions relating to damages are applicable to suits already pending ; but 
it will be observed that it only applies to such in case no verdict ias 
been rendered or no decree for an account or assessment of damages 
has been pronounced. These suits are therefore in the situation of 
actions which might be instituted after the passage of the bill, and 
the question is the same as to both of them alike, and that is : is this 
method of getting at the damages on the whole a good one? I do 
not see any virtue in the attempt to draw a distinction between the 
damages in pending cases and those hereafter to be brought, unless 
something has been done relating to the damages. The law expressly 
excepts the latter class of cases from any effect on this bill. But if 
this is a stumbling-block to any I would not insist upon keeping it in 
the bill. 

The great glory of the proposed law is that it limits reissues. There 
is nothing so illogical, absurd, and unfair to one who has studied the 
common law as the present la w regarding reissues. It is possible that 
in this regard I may have more positive opinions than I should have 
had were I less acquainted with the wrong and injustice that is done 
under the law now in existence. . I will give the history of a single 
case which came to my attention as counsel. A mechanic made a 
useful and valuable invention relative to the use of steam. A man 
who manufactured and dealt in things kindred to the invention asked 
the mechanic to join with him in the manufacture and sale of the 
mechanic's device. He declined, desiring to carry on the business 
relative to his own patent in his own way. To use the language of 
the manufacturer, as near as I can remember, he said : 

I got mad ; I wrote to Washington to see if there was not something in the 
Patent Office that would anticipate the invention. The reply was that there was 
nothing. I wrote again that among all the things in the Patent Office there must 
be some snch thing, but they could find nothing of the kind. TJien I went myself 
and I hunted up this patent taken out by an Englishman. I went to London and 
bought the patent, and came back and got it reissued, and now I've got him. 

Telling this story to a member of this House a few days since, he 



9 

replied that lie knew of a similar case. But to return to the story. 
The manufacturer did bring an action on the patent he had thus 
bought and procured to be reissued. He failed to sustain his patent, 
but not until he had carried it to the Supreme Court. The litigation 
was very expensive, occupied a great deal of time, and did great in- 
jury to the mechanic. 

I know persons of good character and standing who get patents 
reissued to cover as far as possible everything valuable within the 
reach of the patent down to the date of the reissue. 

If called upon with reference to a patent, the first question is, can 
it be made better and stronger by a reissue ; if it can be, a reissue is 
obtained. How it is done I do not know, but it is done ; and then a 
suit is brought on the reissued patent. So.metimes a suit fails, and 
then the patent is surrendered and a new suit brought on the reissued 
patent. This reissue is obtained behind the back of the defendant, on 
€x parte testimony in certain cases under the old law. 

Mr. Speaker, can you conceive of anyting more revolting to a fair- 
minded man than this ? In every other part of the case, and in every 
other kind of a case, if a party has evidence he brings it before the 
court aud the other party has the right to cross-examine and disprove. 
This is not so here. If a patentee is defendant, or if he finds his pat- 
ent does not cover the defendant's machine, instead of having a fair 
trial, he goes to the Patent Office, surrenders his patent, and then 
comes forth and attacks the defendant with the new patent obtained 
behind the back and without the knowledge of the defendant. 

To state the case is to tell a story of meanness and cowardice. How 
curious a spectacle it is, Mr. Speaker, to see an educated gentleman, 
who looks to some extent after the morals of the community, one you 
<;an depend on upon all ordinary occasions and with reference to all 
ordinary offenses, and in fact with reference to every kind of wrong 
except the one they are engaged in, guilty of such conduct as this. 
Besides the law itself contemplates and opens the door and furnishes 
the machinery for these practices. Who can justly object to this 
Senate bill No. 300 in its limit of reissues ? It says : 

But no new matter sliall be introduced into tLe specification not shown, con 
tained, or substantially indicated in tbe specification or drawings of the ori>jiuaI 
application or its amendments, and which the jjatentee woiild have been entitled 
to include as a part of his invention in the patent originally granted. 

What a commentary upon our present patent system it is that such 
a provision should be necessary ; that now, in the year 1879, we should 
have to pass an act that a man shall not have in a reissued patent 
what was never " shown, contained, or substantially indicated in the 
specification or drawing of the original application or its amend- 
ments." 

But so it is. And now when it is attempted to remedy a great evil 
in this great system affecting the business relations of our whole peo- 
ple great efforts are made to prevent the remedy. 

It is true that our courts have of late been deciding cases inaccord- 
auce with the provisions of the proposed law, but they do not pre- 
vent the evil in the Patent-Office of reissues on ex parte evidence, 
which take by surprise other inventors and shock their sense of justice 
and right. 

Now, what is there in this system of patents with its reissues and 
its limitations of reissues, its limitations of the life of i^atents — what 
is there in all this which affects one man more than another ? Noth- 
ing at all; I repeat it, nothing at all. It is equal and just to all ; it 
is an improvement on the x)resent laws. Have you a patent not 



10 

worth $20 ? If yes, it had better die at the end of four years. Have 
you a patent worth more than $20 ? If yes, it is better for you that 
those patents should die which are worth nothing, but which stand 
a threat against the use of yours. Have you a patent which is worth- 
less unless reissued for something which is not in either the original 
drawings, models, or amendments thereto, nor substantially indicated 
therein, then I say you ought not to have it. Have you a patent that 
is valuable, then it is not injured by having anterior patents, which 
might under the present law be reissued to cover yours, confined to 
what is shown in the model, drawings, and specifications. All those 
parts of the bill which we have discussed are eminently just. They 
are calculated to prevent fraud and wrong dealing. 

If again we look at the case of an inventor who seeks for a reissue 
and obtains it because he was careless enough to misdescribe his in- 
vention. Well , he CO vers by his reissue machinery which was not 
touched by the original patent, and which was lawfully built and 
used at a time when no patent covered it, and when it was of course 
lawfully built and used. But a reissue under the j)resent law relates 
back to the date of the origiaal patent, and covers and enables the 
patentee to stop such lawfully built machinery. Many a man who 
could well have avoided the use of the device had it been covered by 
any claim in existence when he built his machine, now finds the cost 
of the change so great that he must submit to heavy terms imposed 
by the owner of the reissued patent. 

This power offers great inducement to the patent speculator and 
leads to most of the evil which flows from the right to reissue. Sec- 
tion 7 takes away this retroactive feature of the law. On the other 
hand, the surrender and reissue of a patent has been held to destroy 
the j)atentee's right to all the damages which had accrued under the 
original x^atent up to the time of the surrender. This section remedies 
this plain injustice and enables a recovery to be had upon the patent 
actually surrendered. I have not called attention to everything in 
the bill. It has certainly been considered a great length of time. 
Two whole years have been passed in its discussion and perfection. 
The greatest pains were taken to give it publicity. Written requests 
for opinions regarding it were sent generally to those known to be 
interested in the patent law. 

Notwithstanding all this I am satisfied this bill, owing to the late- 
ness of time, cannot be passed the present session. I have had so- 
many inquiries made of me regarding it that I somewhat hurriedly 
take this means of answering the questions. If it does not affect the 
legislation at this session, this expression may help to keep attention 
to the details of one of the most important branches of our national 
jurisprudence. 

The patent system is credited with the great progress of our peo- 
ple in the arts and sciences. It should be touched by cautious hand. 
Its abuses must be removed. This bill will, if passed, remove abuses 
which do not belong to and form no part of the system itself, but 
excrescences grow upon it. The attempt should be to preserve that 
which encourages invention, and destroy those features which lead 
inventors to worry and prey upon each other. 



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